This week's book giveaway is in the OCPJP forum. We're giving away four copies of OCA/OCP Java SE 7 Programmer I & II Study Guide and have Kathy Sierra & Bert Bates on-line! See this thread for details.
Well it turns out the answer is in later in the video I linked to! The solution is to change the server location settings. Right-click Tomcat server in the Eclipse server list, and click Open. Change server location to "User tomcat installation" and then it works.